"The futures are down big, signaling a much lower open..."
How often have you heard that? How often has it been wrong?
I would say it has been consistently wrong, ever since the end of the Great Recession in Europe.
I focus on Europe because it's impact has loomed large on the real trading in our markets, but whoever trades before hours either doesn't understand the impact or has some ridiculous algorithm set to the wrong data.
Here's the real story of what happens in the morning these days. First, we take our cue from Europe simply because it is the last market that is open and the book gets handed off to the U.S. when traders come to work.
But saying Europe is up does not point blank mean we should be up -- and of course vice versa. If Europe is up because the euro is down, then you should recognize that we have the potential for a down opening, as many stocks are all about the need for a weaker dollar.
A European market that's up on earnings and strength of the economy is terrific for our market.
Other inputs are suspect. Tech can turn around the Nasdaq, which can turn around the entire S&P -- because so many of the big-caps are tech.
So when you see a story like Analog Devices Inc (ADI) , where business is better, you have to know:
1. That ADI is an Internet of Things company; and
2. That means that more than FANG can go higher.
That this is at all revelatory is only because the futures traders as a whole are so witless.
There, I wrote it. Now I feel better.